The Princeling of Nanjing (23 page)

“Of course not. It was a handshake deal as far as those details were concerned. What was funny was that the Governor commented on that. He said to Mr. Calhoun that this was the way Chinese preferred to do business — friend to friend.”

“
Guanxi
?”

“Exactly.”

“How about protecting the profit margins? Did the Governor comment on that?”

“All he said was that it was up to us to make sure the company was profitable, but given that the customers had to buy from us, he couldn’t foresee that ever being a problem.”

“That made your sales and marketing job kind of easy, didn’t it.”

He smiled tentatively. “There was never any problem with turning inventory or making a profit, if that’s what you mean. My job is mainly inventory control and margin management.”

“So the company has operated along the lines that Tsai Lian established from the start?”

“Yes.”

“And you’ve been running it since day one?”

“It was Mr. Calhoun’s idea that I do it. He wanted someone who knew our end of the business and someone he felt he could trust. It was a huge advantage that I could speak both languages.”

“What does Lau Ai do?”

“She comes to the office every quarter with an accountant — actually that Ling you mentioned — to check the books. That’s about it.”

“Vincent, talk to me a bit about the money side of the business.”

“What exactly do you want to know?”

“What are your sales?”

“The company has grown every year since we started, and this year we were on schedule to do close to four billion dollars.”

“That’s huge. What about your profit margins?”

“Twenty percent, on average.”

“And what do you net?”

“Ten percent.”

“So about four hundred million dollars in profit this year, split almost evenly between the partners.”

“Yeah, that’s about right.”

“If you didn’t have the deal with the Tsais, where would those numbers be?”

“Mr. Calhoun was operating at around seven to ten percent gross profit margin in Singapore and Malaysia and was lucky when he broke even. I imagine it would have been much the same here without the arrangement with the Tsais.”

“So basically the Governor is now putting four hundred million a year into your company coffers.”

“I wouldn’t put it that way,” Yin said.

Ava shrugged. “Where does the profit go? Do you put some of it back into inventory? Have you invested in other businesses?”

“Obviously we’ve had to keep expanding our inventory, and there’s an allocation for that. Some money goes back to the U.K. parent company and the balance goes into an account in Cyprus.”

“Whose account?”

“I don’t know. It’s just a number.”

“Is it logical to think it’s Mr. Calhoun’s?”

“I guess.”

“How about the Tsai family profits?”

“Lau Ai looks after those.”

“What do you mean?”

“She issues her own instructions to our bank. It’s her business. I don’t interfere.”

Ava pushed her chair back from the table. Yin recoiled and she saw he was startled.

“I have to make a trip to the ladies’ room,” she said. “When I get back, I’m going to ask you many of the same questions again, just to make sure you haven’t forgotten anything. But I have to tell you that so far I think it’s gone very well.”

“Can I leave when we’re done?”

“Not quite so fast. I’ll explain that part later,” Ava said. “Oh, and give me your cellphone. I’ll hold on to it until I come back.”

Suen was sitting in a chair just outside the boardroom. He looked tired and bored.

“It’s going very well,” Ava said. “I need to make some phone calls, and I’d appreciate it if you could contact your videographer and tell him to come here.”

“Yin stays in the room alone?”

“Yes. I have his phone, so there isn’t much he can do. Check in on him once in a while just to keep him on edge. I’ll be back soon. And look, I know you had a long night. If you want to get a replacement, I don’t mind.”

“I’ll manage,” he said.

The building’s lobby was empty and the front desk was still unoccupied. Ava sat down and took out her phone. She checked the time and saw it was just past seven a.m. in the U.K. She hoped that Michael Dillman was an early riser.

“Dillman,” he said after two rings, his voice sharp and clear.

“This is Ava Lee.”

“Ms. Lee, it is early.”

“Well, I have what you want and I was eager to tell you.”

“I beg your pardon?”

“You told me last night that you didn’t have anything that directly connected Dennis Calhoun to Governor Tsai, and that you didn’t have anything that detailed how Mega Metals actually operates. Well, I’ve found both of those things.”

“How is that possible? When we spoke last night, my understanding was that you were dead-ended. What could you possibly have found so quickly?”

“I found Vincent Yin.”

“The name sounds vaguely familiar.”

“He’s the managing director of Mega Metals in Nanjing. He’s a Brit, a graduate of Northumbria University, and was an employee of Calhoun in Newcastle before being appointed to this position.”

“Oh yes, I remember seeing his name on one of your charts.”

“I have just finished having an initial discussion with Mr. Yin.”

“When?”

“Five minutes ago.”

“By phone?”

“In person.”

“Where?”

“Here in Shanghai.”

“What’s he doing in Shanghai?”

“He came here to meet with me.”

“Why?”

“I invited him.”

“I see, but then why would he tell you these things?”

“I was persuasive.”

Dillman paused, and Ava waited for him to ask the question she wasn’t going to answer. Instead he said, “What did he tell you?”

“He admitted that Calhoun put up all the money and gave the family fifty-one percent of the business in exchange for the family strong-arming construction companies into buying from Mega Metals. I think that fits the definition of ‘bribe’ under the U.K. Bribery Act.”

“Yes, it does, and if that is correct then the Tsais are equally guilty of accepting bribes.”

“And of coercion, although I’m not sure how that would play out under Chinese law.”

“You said you’ve found a link between Calhoun and the Governor. So far, I haven’t heard anything about that. All we have — on paper — is proof of a relationship between Mr. Yin and Tsai Men’s wife.”

“The deal was negotiated between Dennis Calhoun and Tsai Men, and then closed by Tsai Lian himself in a meeting with Calhoun and Men.”

“Yin told you this?”

“Yes.”

“How does he know?”

“He was at every meeting between Calhoun and Men, and he was at the meeting where the Governor committed to the deal and promised to uphold the Tsais’ end of it,” Ava said.

“Let’s back up for a second,” Dillman said. “You’ve made some assumptions about how the family persuades companies to buy from Mega Metals. How does Yin say pressure would be applied?”

“If a company didn’t agree to buy from Mega, it wouldn’t get any government business and it would find getting building permits of any kind very difficult.”

“Those were his exact words?”

“Yes.”

“And he claims he heard those same words come from the mouth of Tsai Lian?”

“Yes.”

“And you believe him?”

“He has absolutely no reason to lie. Besides, he is confirming much of what we guessed.”

“That is true,” Dillman said slowly. “Ava, can I ask you why Yin was so willing to share this information with you?”

“The usual reason people do things like this: a combination of self-preservation and self-interest.”

“Was he coerced in any way?”

“I assure you he is in wonderful health — in mind and body — and I’m confident that I can persuade him to put everything he’s told me in writing, with names, places, and dates. I’ve also made an arrangement to videotape him.”

“Could we interview him?”

“I’m not so sure that’s a good idea.”

“It would add tremendous credibility and make it an easier sell to my editor and the lawyers.”

Ava thought of the man she’d just left in the boardroom. How much pressure could he sustain? What assurances would he need? What would make him feel safe? What did she have that she could offer besides his freedom and, if the Chinese authorities were in a nasty mood, his life? If he truly believed what she’d said about the Chinese police, then his life was a strong starting point, she thought.

“I’m not going to say no,” she finally said. “But I’d like to videotape him first. I’ll send you a copy of the video as soon as it’s done. Review it and let me know if you think an interview is necessary.”

“How soon can I expect to see the video?”

“In a couple of hours.”

“Can I brief my editor in the interim?”

“Of course.”

“And tell her that an interview is a possibility?”

“Yes.”

“Will you call me or will I call you?”

“I’ll have to call you.”

“That’s fine,” Dillman said.

“Michael, how big will the Calhoun-Tsai deal actually play in the U.K.?”

“It’s incredibly juicy. It will be a front-page story for us, and once we run it, every tabloid in the country will have a field day with it. There’s nothing they like more than skewering the rich and the powerful. Calhoun also happens to be pompous, self-important, and a hypocrite.”

“That’s satisfying to hear,” she said. “Okay, I’ll be in touch as soon as we’re done.”

She ended the call and did a quick check through her emails. Feng had sent her one with the subject line “Jiangsu Insurance Correspondence.” It simply read,
Here are some emails between Patriot Insurance in the U.S. and Wu Wai Wai.
She opened the attachments and quickly scanned them. There was nothing subtle about the content. In the first, an Alan Jefferson, senior vice-president of international business development, asked Wu to confirm when and how much of the province’s insurance business would be transferred to the new company. She had replied that the transfer would be done within three months of their deal closing and that it would amount to at least $200 million. He responded by asking her how she could be so sure about the timing and amounts. She wrote back that she had discussed the matter with her brother and her nephew. Tsai Men was copied on that email but Tsai Lian wasn’t. Ava looked at the list of people copied on the previous emails. For each there were at least five Patriot Insurance executives and Ling. Tsai Men was named on only the one, but it was important. The rest of the emails were about boiler-plating the deal, arranging for its signing, and transferring the money.

Ava could hardly believe how blatant both parties had been in their collusion. She could only conclude that the Patriot employees had no idea they were breaking the law. As for Wu, she probably felt she was above the law.

She phoned Feng. “I’ve just read the emails that Ling sent to you. They’re fantastic.”

“I know.”

“I’m just about to forward them to my contact in the U.S. You should give Ling a heads-up that some of this could become public in a few days.”

“He’s a careful man. He sent them to me from a computer in a hotel business centre. And when I spoke to him after I got them, he said he was leaving tonight for a holiday in Japan.”

“Good.”

“Is there anything else you want me to do?” Feng asked.

“Not right now, but don’t stray too far from your phone.”

Ava reread the emails and smiled as she wrote to Sam Curry at the
Wall Street Tribune
.
Here, I think, is everything you need to tie Patriot Insurance directly to the Tsai family, and to some business practices that seem to fall afoul of the Foreign Corrupt Practices Act. Let me know that you received this email, and tell me what time is good for me to phone you.

She checked the time. It was three a.m. in New York, and Curry wouldn’t see the message for hours yet. She imagined she wouldn’t hear from him until about eight. She felt like she was on a roll, and the idea of waiting that long irritated her, but she had no choice. She turned her attention back to what she had on hand: Vincent Yin.

Ava was in the lobby for close to half an hour thinking about Yin. She reviewed the questions she’d asked, the answers Yin had given, and tried to identify holes. Then she thought about the pitch she was going to make to convince him to put his recollections of the Calhoun-Tsai deal on paper and on video. What was left, and what perplexed her, was what she would do with Yin when he complied, and she had no doubt at all that he would comply. Getting him to talk in the first place had been much easier than she had thought it would be, and she couldn’t imagine that he would offer resistance now.

He seemed to be a decent enough man, a company hack who’d become caught up in the demands of a boss he wanted to please. He probably never once thought that what they were doing was illegal or immoral, and his admission had been equally naive. But after the matter became public she knew he could find himself accused of managing a criminal enterprise. She didn’t know how he would react once the story was out, but denial wasn’t an option as long as she had him on the record. The problem, she thought again, was what to do with him until the story did become public. She couldn’t let him go back to his office. She couldn’t let him communicate with Calhoun or Tsai Men. So that left two choices — keep him under lock and key in Shanghai, or scare him so much that he would voluntarily go into hiding. The advantage to scaring him was that it would give him a realistic dose of what he could expect in the coming days and weeks, and it would give him the chance to get prepared. She felt she owed him that much.

She walked back to the boardroom. Suen was still in the same spot. “The guy with the camera should be here soon,” he said.

“Keep him here. I’ll come and get him when I need him,” Ava said.

She opened the door and saw Yin standing by a window. He turned when he heard her and she saw a sheepish look on his face. She wondered if he was having second thoughts about co-operating.

“I think you should sit again,” she said.

When he had settled into the same chair, Ava slid several sheets of paper to him and handed him a pen.

“I’m going to dictate a statement and you’re going to write it down,” she said. “If anything I say is inaccurate or incomplete, I want you to tell me and we’ll discuss it.”

“Why are you asking me to do this?”

“Vincent, this little deal that Mr. Calhoun and Mr. Tsai concocted just happens to break British law and Chinese law. One is going to be charged with bribing a public official, and the other with accepting bribes and corruption. You are a key figure in all of it. What you have to say corroborates what we know and distances you from any blame.”

Yin stiffened. “I heard all that, but I still don’t know why I should help you any more than I already have.”

“The U.K. Ministry of Justice is already aware of the scam, and the Chinese government soon will be. Things are going to get very nasty for everyone concerned. You need to cover your ass,” Ava said, her frustration building. “Mega Metals is going to blow up. You can be collateral damage or you can stand safely on the sidelines getting credit for having done the right thing.”

“I’m a British citizen,” he said stubbornly.

“As I said before, you’re a Chinese resident doing business in China. The government here won’t care what passport you carry. As far as they’ll be concerned, you’re Chinese and will be treated accordingly.”

“But Mr. Tsai
is
the government.”

“He’s the provincial government, and a long way removed from Beijing. When the shit hits the fan, there’s nothing he’ll be able to do to protect you even if he wanted to, and he won’t, because the only chance he’ll have to cover his back is to make you the scapegoat.”

Yin paled and Ava saw that his hands were shaking.

“How can you be certain about what’s going to happen?” he said.

“You were correct earlier when you said the people I work for have a grudge against Mr. Calhoun,” Ava said. “They’ve been trying to find something to use against him, and then this came to their attention. It is unfortunate that you and the Tsai family have to get dragged into it, but that’s the way it is.

“As for what’s going to happen, in a few days some very reputable international newspapers are going to publish a story that will outline Mr. Calhoun’s crimes. Given his position in the Conservative Party, you can expect that every media outlet in the U.K. will run the story as well.”

“He has a lot of powerful friends.”

“Not in the media, and you can bet that when the stories break, his friends will be nowhere to be found.”

“He’ll deny everything.”

“I have no doubt that he’ll bob and weave, and that’s when your name will likely get thrown into the fire,” Ava said. “But if you’re smart, you’ll get out in front of this thing. You do have a decided advantage. You know what’s coming down. He doesn’t.”

“How do I get in front?”

“Tell your side of the story first. Tell the truth. I’m sure it could only help you with the authorities,” Ava said.

“I wouldn’t know who to talk to.”

“I’ll help connect you and I’ll help prepare you.”

He hesitated, but Ava saw she had him bending in the right direction.

“One more thing. You should get out of China as quickly as you can. Being here when the story is released is too dangerous. When we’re finished here, I’ll have our man drive you back to Nanjing to get your passport and whatever personal items you want to take with you. You should get out of the country tonight if you can.”

“This is all so rushed and so crazy,” he said, shaking his head.

“Hey, it’s out of your control. The story is going to be published with you or without you. If it’s without, then you’re completely on your own, and I don’t fancy your chances.”

He filled his glass with water and drained it. He wiped his mouth with the back of his hand and closed his eyes.

“Do you need some time alone to think this through?” Ava asked.

“No. Tell me what you want me to do,” he said.

“I want you to do some writing,” she said.

“Write what?”

She opened her notebook. “Write exactly what I read and try to do it neatly. If I go too fast, let me know. I’ll read it through one time so you get the gist, and then you can start.”

“Okay.”

“My name is Vincent Yin. I am a British citizen and an employee of Calhoun Metals, a U.K. firm. I manage Mega Metals in Nanjing, a joint venture between Mr. Dennis Calhoun and the Tsai family. I was personally present and involved in all of the negotiations leading to the creation of the joint venture about five years ago, and I was present when Mr. Dennis Calhoun and Mr. Tsai Lian finalized the details. I wish to repeat and emphasize that it was those two gentlemen — and not anyone else — who concluded the deal and agreed to its financial structure. Those arrangements consisted of Mr. Calhoun bribing Mr. Tsai to deliver provincial government construction business at a fixed and inflated rate. The two men shared the illicit profits almost equally, and in recent years those profits were as much as four hundred million U.S. dollars per year.

“At the time the agreement was reached, I was acting as an interpreter and had no input into its contents. I had some reservations, but I never voiced them directly. I did make mention to Mr. Calhoun that business was certainly done differently in China. His response was, ‘When in Rome do as the Romans do,’ and that passing money under the table in China was a common and standard business practice and we’d be fools not to do it,” Ava said, and then stopped.

“I obviously made up that comment by Calhoun,” she said. “I thought it might fit.”

“It fits perfectly,” Yin said, his eyes widening. “In fact, so well I can hardly believe it. Mr. Calhoun did actually use that line about the Romans at the time.”

Ava smiled. There was something tiresomely predictable about the clichés thrown about by crooks and thieves when the time came for them to justify their actions.